MMX (Minds + Machines) had a good year in 2019, and 2020 looks solid barring COVID-19 impact.

Picture of stock ticker board with words "earnings announcement" below it

Accounting wise, 2018 was a bad year for new top level domain name company MMX (London AIM: MMX). It wrote off $11.3 million related to a contract to run .London, had bad debt write-offs of $2.1 million, and one-off costs of $1.4 million. It lost $12.6 million for the year.

The good news is that this pushed a lot of water under the bridge, making 2019 a stellar year for the company, as detailed in the company’s annual report.

In 2019, MMX reported a profit of $4.7 million, or 51 cents per share.

Sure, that was helped by a couple of accounting gains, but anyway you look at it, 2019 was a much better year for the company.

Revenue increased 25% to $18.9 million, helped in part by a full year of the contribution of ICM Registry, a business it acquired in 2018.

Renewal revenue was $11.7 million, or 62% of the total.

Operating EBITDA was up 79% to $6.4 million.

And Adultblock, a new brand protection product related to the ICM Registry portfolio, generated $1.1 million in recognized revenue during the last two months of 2019.

While ICM had a lot to do with MMX’s changed fortunes, the company also saw positive movement in some of its other top level domains. In Q4, .VIP grew by over 360,000 registrations. Importantly, 267,000 of these were standard sales at GoDaddy. (Read: not heavily discounted sales to China.)

In its annual report, the company notes that it is closely watching the impact of COVID-19. For now, it expects the immediate-term impact to be on one-off brokered sales but those account for less than 10% of the company’s sales.

As it monitors the impact, the company has delayed its decision on a previously-announced dividend until September. In the meantime, it’s going forward with share buybacks of its (now cheaper) shares.

MMX’s report is perhaps the first financial report by a publicly-traded domain name company in the wake of the spread of COVID-19. While the company is hopeful, it provides caution that everyone in the domain business should heed:

“But to believe that we are fully insulated from the global crisis would be unwise.”

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